CASE STUDY

Understanding the enterprise interest in Mirantis and OpenStack

Posted by Hans Ashlock October 7, 2015

With the recent $100 million investment round in prominent pure play OpenStack vendor Mirantis, led by major names such as Goldman Sachs, Intel Capital and a number of others, the commercialization of the OpenStack community is continuing apace in 2015. What started out as a grassroots community project to create an open source ecosystem for building private, hybrid and/or public clouds - and as an alternative to the rapidly growing Amazon Web Services ecosystem - has become an essential part of the cloud strategies of some of the world's largest enterprises (such as the ones mentioned above) and carriers (AT&T in particular has been a big OpenStack player for years).

Mirantis itself has billed OpenStack as no less than "the best way to deliver cloud software," with particular advantages over the numerous proprietary solutions in the market, from direct private cloud competitors such as VMware vSphere to hybrid and public cloud options including AWS and Microsoft Azure. Still, the project's contributors face considerable hurdles in moving it forward in this year and beyond, particularly in regard to reconciling its increasingly fragmented brands and aligning it with enterprise use cases.

What the new Mirantis round means for OpenStack as a whole
The fresh round of cash for Mirantis brings its total haul to $220 million, according to Fortune. Mirantis' products are already used by big-name organizations such as Comcast, Huawei and Intel, and with the new funding the company may be looking to further polish a few key features for these major customers and others.

"The beauty of OpenStack is that it is collaboratively built and maintained by dozens of tech vendors from AT&T to ZTE. That multi-vendor backing is attractive to businesses that don't want to lock into any one provider," Fortune contributor Barb Darrow noted in August 2015.

The investment in Mirantis is also notable in the context of the big acquisition spree that has been affecting OpenStack vendors for some time now. Metacloud, Piston Cloud Computing, Blue Box and Cloudscaling have all been picked up by large incumbents such as Cisco, IBM and VMware parent EMC, leaving the independent Mirantis as something of an exception now in an industry increasingly marked by acquisition and consolidation.

Most likely, investors hope that the latest Mirantis round will help OpenStack solutions close the gap with alternatives like VMware. The latter remains widely used at the moment, but as Al Sadowski of 451 Research told TechTarget in April 2015, there is plenty of demand for moving away from the cost structures of VMware and migrating to something more open - like OpenStack.

Many "don't want to pay the VMware tax. They're looking for open source alternatives and they are increasingly going to OpenStack," Sadowski said.

OpenStack stagnation? The case of comparing it to Docker
The Mirantis news may be well-timed since OpenStack is perceived in some circles as lagging behind other similar projects that are reshaping development, testing and deployment and enabling DevOps automation. One notable example here is Docker.

OpenStack continues to draw attention as a platform for cloud migration.

For more than a year now, Docker has been receiving enormous amounts of attention and investment for its innovative container technology. Containers provide a low-overhead alternative to virtual machines and represent another powerful tool for DevOps organizations looking to accelerate the pace of DevTest and encourage overall business agility.

Docker has been incorporated into many cloud solutions, such as the Google Container Engine as part of the Google Cloud Platform. Meanwhile, OpenStack has made some inroads over the past few months but seems to be lagging behind the pace of some of its peers. Its notorious complexity - perhaps attributable to the size and diversity of its community, a sort of "too many cooks in the kitchen" phenomenon - could still the biggest stumbling block for wider OpenStack adoption.

All the same, there are real opportunities for OpenStack revitalization ahead, not only with the capital flowing to vendors like Mirantis, but also in the possibility of combining OpenStack with other technologies ranging from Docker to IT infrastructure automation platforms such as QualiSystems' CloudShell. For example, OpenStack could be used to programmatically expose hypervisor capacity to users for on-demand use.

"There are opportunities for OpenStack revitalization ahead."

Users could then use OpenStack to request Docker hosts, which would run Docker containers. In other cases, the OpenStack-Docker combination could be superfluous. Both Amazon and Google are already working on APIs that allow teams to provision capacity for Docker from within their data centers.

"[I]f all an enterprise IT team needs is Docker containers delivered, then OpenStack - or a similar orchestration tool - may be overkill," explained Adobe vice president Matt Asay in an August 2015 column for TechRepublic. "For this sort of use case, we really need a new platform. This platform could take the form of a piece of software that an enterprise installs on all of its computers in the data center. It would expose an interface to developers that lets them programmatically create Docker hosts when they need them."

One of OpenStack's main challenges here is the same as it is elsewhere: Moving an entire community - composed of companies that often compete fiercely with each other for cloud customers - at a speed similar to that of a large single vendor such as Amazon, Google or Microsoft. The major recent investment in Mirantis may be intended to ultimately make it easier for vendors to do just that with their specific OpenStack products and services.

The takeaway: Mirantis recently received a $100 million investment round from Goldman Sachs, Intel Capital and other key names. The vendor may now be better positioned to fine-tune its solutions for enterprise customers already using - or currently very keen to use - OpenStack as part of their cloud infrastructure. The funding also speaks to the growing need for focus in OpenStack-compatible products and services. While proprietary clouds continue to move forward, OpenStack still needs a shot in the arm to keep evolving and remain a valuable tool for organizations seeking to become agile.